The People's Bank of China on Febraury 18 announced a 50 basis point cut to its reserve ratio, from 21% to 20.5%, for the country's largest banks, effective from February 24.

The Chinese central bank had steadily added to the reserve requirement during the past couple of years, so its second cut in the space of four months is another indication that the lending situation in China is changing. Banks are no longer being required to lock up such large quantities in cash and instead find themselves